Average Book Value Of Investment Formula
Note that the book value of the asset can never dip below the salvage value even if the calculated expense that year is large enough to put it below this value.
Average book value of investment formula. Initial investment scrap value working capital 2. Average investment book value at year 1 book value at end of useful life 2. To arrive at the book value simply subtract the depreciation to date from the cost.
The formula for arr is. In case where subsequent investments are to be made after the initial investment the above formula would not account for the additional investment. Book value per share will be bvps 495 61 book value calculator.
Arr average annual profit average investment. In the example above the asset s book value after 6 years would be 10 000 6000 or 4000. Average annual profit total profit over investment period number of years.
You can use this book value calculator.